- Thirteen Ministerial exemptions have been granted that provide various levels of relief from the AML/CFT Act
- PAYE intermediaries are largely exempt in relation to certain transactions
- The exemption that allows members of a designated business group to share a compliance officer has been rolled over
The Minister of Justice has the power to grant ‘Ministerial exemptions’ from the AML/CFT Act under section 157 of that Act. The Anti-Money Laundering and Countering Financing of Terrorism (Class Exemptions) Notice 2018 has been published just in time for the 30 June 2018 expiry date of some of the class exemptions it replaces. The exemptions are valid for five years, so expire on 30 June 2023.
Each part of the schedule in the Notice sets out a separate class exemption as follows:
- Body corporates created under the Unit Titles Act 2010 and body corporate managers.
- The Public Trust, Māori Trustee, and trustee companies within the meaning of the Trustee Companies Act 1967 (collectively referred to as the ‘statutory trustee corporations’).
- Managers of specified retirement schemes for services provided in respect of the specified retirement schemes.
- PAYE intermediaries (see more below).
- Reporting entities whose customers are licensed managing intermediaries.
- Reporting entities whose customers are specified managing intermediaries.
- Shared compliance officer for members of a designated business group (see more below).
- Financial advisers arranging for relevant services to be provided for retirement schemes.
- Specified employee security purchase schemes.
- Specified securities investment schemes.
- Casino loyalty schemes.
- Statutory supervisors of retirement villages in relation to repayable funds accepted in accordance with the Retirement Villages Act 2003.
- Designated issuers that issue debt securities to specified subscribers through intermediaries.
The exemptions granted from the AML/CFT Act vary – some are full, others are only partial and some are subject to conditions. So it is recommended that you read the part of the Notice in detail if you think it may apply to you. The exemptions that are likely to be most applicable to accountants are elaborated on below.
‘PAYE intermediary’ means a person who is approved as a PAYE intermediary under section 15D of the Tax Administration Act 1994 (and includes a PAYE intermediary who is approved as a listed PAYE intermediary under section 15G of that Act).
However, the exemption is only with respect to ‘authorised transactions’ which is any transaction that satisfies the requirements of section RP 2(2), RP 6, RP 14, RP 15 or RP 16 of the Income Tax Act 2007 or that fulfils the obligations of a PAYE intermediary under any of those provisions.
The exemption is only from the following provisions of the Act:
- Sections 11—39: customer due diligence (CDD), including ongoing CDD and account monitoring.
- Section 49: obligation to keep transaction records.
- Sections 50—71: compliance officer, risk assessment and AML/CFT programme and the biennial audit thereof, annual reporting, some record keeping.
- Sections 106—115: offences relating to cross-border transportation of cash.
So essentially, the requirement to report suspicious activities and the obligation to keep records in relation to suspicious activities remains.
This exemption is also subject to the following conditions:
- It applies only to transfers between New Zealand bank accounts and does not extend to any transfer from or to a foreign bank account.
- To be eligible, a PAYE intermediary must not use or provide any payroll remittance card in the course of its authorised activities.
Shared compliance officer for members of a designated business group
A designated business group (DBG) is a group of two or more ‘related’ reporting entities where there is a written agreement between the reporting entities that make up the group. The word ‘related’ is not defined which allows the AML supervisor; the Department of Internal Affairs (DIA), the flexibility to make its own determination as to whether the entities are sufficiently related on a case by case basis. Further guidance on DBG eligibility is in the Designated Business Group: Scope Guideline. For further information regarding the process for forming a DBG refer to the Designated Business Group: Formation Guideline. The election to form a DBG is made in accordance with Regulation 6 of the AML/CFT (Definitions) Regulations 2011.
A member of a DBG can rely on another member to carry out some obligations on their behalf (section 32 of the Act). These include:
- Risk assessment
- Customer due diligence (CDD)
- Ongoing CDD and account monitoring
- Annual reporting
- Suspicious activity reporting
- Prescribed transaction reporting
- Record keeping
This exemption allows members of a DBG to also share a compliance officer. The original exemption came into force on 30 June 2013 and was due to expire on 30 June 2018, but it has been rolled over for a further five years. The scope of the exemption has also been extended so that, where New Zealand reporting entities have formed a DBG with entities in Australia, the shared compliance officer can be based in Australia.
Class exemptions notice
The full AML/CFT (Class Exemptions) Notice 2018Read now